Q & A

We recently sat down with Will Stringer to find out more about his passions, his calling and generally dive in deeper to get to know him.

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What are some of the biggest challenges you’ve faced in your work over the last few years?

Obviously, March 2020 changed a whole lot of stuff. For us, it was a little bit of an opportunity to go heads down and do really efficient work, because we were still so early in figuring out the product. Instead of spending time on airplanes or going out and meeting people in person and talking, it was internet forums. I'm talking to people in these different communities, and really able to very efficiently have those conversations, because everybody's stuck at home, everybody's on their computer. We were still figuring it all out as the world went into chaos. But then again, because we weren’t an established company having to pivot, that struggle was just kind of infused into our DNA. COVID is sitting right here, staring, and we kind of just took it in stride, because there was no other option. It's not like we had a status quo that we were already operating under.

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Developing alternative business models to the startup status quo has become a central moral challenge of our time. These alternatives want to balance profit and purpose and put a premium on sharing power and resources.

Why is getting investments in this alternative model crucial for those who seek it?

If you look at data, you can look at stocks, bonds, private equity and venture capital in the current form and you can see the data on the returns. That gives comfort to people when they can say, ‘This has been done for 30 years, so I have a pretty good idea of what the risk reward on this product is going to look like, or this investment is going to look like.’ That gives people some comfort. With the new way, sometimes there's not much data there, and that gives people a lot of pause. It takes a while to get people comfortable with that. Not as many people are going to take a chance on something new and alternative versus what's traditional. Additionally, the traditional model is fairly relationship driven, and that creates barriers to entry.

With Chisos, we form a lot of partnerships with accelerators, incubators and entrepreneurial organizations so that they can know that we're an option and send entrepreneurs our way. We have an open online application, so nobody has to know me or know anyone on our team to get an audience with us. If you apply online, you're a U.S. citizen or permanent resident, you are building a business that is scalable and capital efficient, then you're going to have a chance.

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How do we shift the narrative about the role of capital in BIPOC communities and reframe the perceptions of the risk involved?

The first thing I would highlight is the need for data. If you can leverage the early adopters that are interested in trying something new and mobilizing capital to projects and people in the BIPOC community, and then they succeed, you can show that data. Unfortunately, that takes time, there's no way to speed up a track record.

From our standpoint, it's about structuring. Consider our model: An entrepreneur comes to us on day one, pre-traction and often pre-revenue, and we invest in them up to $50,000. We sign an income share agreement with the individual, and then we sign a SAFE - or Simple Agreement for Future Equity - with their company. We get a little bit of equity in their company, but the income share agreement is an investment in that person. Basically, it says that when they earn income over a certain threshold, they pay back the investment at a fixed percentage until they hit an amount cap or a time cap. With our structuring, we're investing in the person, because often there's not much of a company. If you're at the early stage of an entrepreneurial idea, that's a very high risk situation for anybody to invest directly in the equity of that company only. With our model, even if the company fails, we're still invested in the person, and then that person repays us through their income over time. It’s pretty low-risk, because you're betting on that person earning money or being successful over time, and usually, the person doesn't go away or disappear.

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What are the top three pieces of  advice you would give to BIPOC entrepreneurs, who are dedicated to both purpose and profit, as they are starting or scaling their business?

First, know the options that are out there, because it’s not just venture capital. There's a lot of new options out there, from what we're doing to grants and so much more. If you have some revenue, there's a number of different alternative capital options for revenue-based financing or companies with revenue.

Second, build a community. Get out on social media: It’s free to interact with, usually, and if you're posting interesting content or interacting with people and asking good questions, you can build a community and a following. At a minimum, get involved with a community. People think that they need to build in secret and not put information out there because they might fail or they might look stupid, but you have to get rid of that. You have to be out in public and interacting with other people, because a lot of people want to help especially if you're vulnerable and genuine. Get involved and don't build in your silo.

Third, learn the incentives. Whenever you're going out to ask somebody to help you or invest in you, or when you're doing something for someone else, just understand where the incentives lie. If you're going to venture capitalists, their incentives are to return three to ten times the money they invest back to their limited partners (LPs) in five to seven years–that’s a very specific incentive. If you're building a company that has slower growth, venture capital is not for you. Don’t go that path–find other sources of capital.

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What is the call to action for investors who seek to promote social justice through investment solutions?

My lens is on the investment side and the capital mobilization side of things. We have more and more reports with good data around who's getting capital, how they're getting capital, and when they’re getting capital. That sparks some traditional capital sources to make a little bit of change and stand up some other programs or start to mobilize capital in different ways. Racial disparity in the U.S. highlights the importance of alternative capital and different ways of getting capital into the hands of entrepreneurs.

Personally, when the Black Lives Matter movement began, it helped me realize some of the injustices and inequalities that are present. With Chisos, I did not think about any kind of mandate on who would be getting capital that we would be investing in. Today, I'd say upwards of 70% of the founders that we've invested in have been from an underrepresented population. That was not something that I had expected when I had first started, but the more and more I got into the alternative capital world, the more and more I realized that traditional venture capital has failed in that regard.